Global Compliance Desk – France

France: Amendment to Paid Leave Entitlement

Recently, French labor law has undergone significant revisions aimed at aligning it with European Union directives [EU Charter of Fundamental Rights and Directive 2003/88] particularly concerning paid leave entitlements.

On September 13, 2023, the French Supreme Court rendered a series of landmark decisions that overturned previous case law about employee entitlements during periods of sickness, workplace accidents, or parental leave.

The new amendments introduced under Article 37 of Law No 2024-364 dated April 22, 2024, known as the Law on various provisions for adaptation to European Union law (DDADUE), aim to harmonize the provisions under the Labor Code on accrual of paid leave for non-occupational sickness.

These legislative changes came into force on April 24, 2024, marking a significant milestone in the evolution of French labor regulations. 

Accrual of paid leave during a work stoppage of a professional nature

Previously, for determination of annual leave, the period of suspension of contract due to a work-related accident or occupational illness was considered a period of actual work within the limit of an uninterrupted period of one year.

As per the new amendment, the limit of one year beyond which absence no longer gives rise to the right to leave has been removed for work-related accidents or occupational illness. Hence employees shall have unrestricted entitlement of 2.5 working days per month (i.e. 30 days per acquisition reference period). 

Accrual of paid leave during a work stoppage of a non-professional nature

Previously, there was no separate provision regarding accrual of paid leave during periods of non-occupational illness or injury.

The new amendment deviates from the existing annual leave entitlement of 2.5 working days per month for employees whose non-occupational illness or injury creates a work stoppage. In the case of such employees, the duration of leave to which an employee is entitled to shall be 2 working days per month, with a limit of 24 working days per year.

Insertion of Additional Requirement for Determination of Annual Leave

Previously, only the following leaves/rest periods were considered to be periods of actual work to determine the duration of the leave  – 

• Periods of paid leave, periods of maternity, paternity, child care, and adoption leave.

• compulsory compensation in the form of rest provided for overtime work.

• days of rest granted under a collective agreement for overtime work, the periods within the limit of an uninterrupted period of one year.

• The period during which the employment contract is suspended due to an accident at work or an occupational disease.

• The periods during which an employee is maintained or recalled to national service for any reason.

As per the amendment, periods during which the execution of the employment contract is suspended due to work stoppage linked to an accident or illness, not of a professional nature shall also be considered to be a period of actual work to determine the duration of annual leave. 

Additional Provision for Carryover of Accrued Annual Leave for Employees

Previously, the French labor law did not provide any legal clarification regarding the carryover of accrued annual leave when an employee is unable to use it due to illness or accident.

The new amendment has added new provisions concerning the carryover of accrued annual leave when an employee is unable to use it due to illness or accident. 

• When an employee is unable, due to illness or accident, to take all or part of the leave he has acquired during the leave period, he shall benefit from a deferral period of 15 months to be able to use it. This deferral period begins on the date on which the employee receives, after returning to work, information relating to the number of days available to him and the date until which these days of leave can be taken. 
• If the employee’s absence exceeds one year and their employment contract remains suspended, the carry-over period extends until the end of the annual leave period, typically until May 31 of the following year. In this case, upon resumption of work, the deferral period, if it has not expired, is suspended until the employee has received information relating to the number of days available to him and the date at which these days of leave can be taken.
• At the end of a period of work stoppage due to illness or accident, the employer is required to inform the employee, in the month following the resumption of work, regarding the number of leaves available, and the date until which these days of leave can be taken by any means conferring a certain date on their receipt, in particular through the pay slip. 

Deferral Period – The deferred period is the period from when a person has become unable to work until the time that the benefit begins to be paid.

Retroactive Applicability of the Amendment

The amendment shall be retroactively effective from December 1, 2009, and apply retrospectively to the acquisition of paid leave during sick leave and carryover rules. This means that rules of accrual and carryover of paid leave entitlements are extended back to this date. 

Employers must ensure that employees don’t exceed 24 days of paid annual leave for absences related to non-occupational illness.

For example – for employees present as of April 24, 2024, actions regarding leave days for sickness since December 1, 2009, must be initiated within two years from April 24, 2024, or rights may be forfeited. For instance, if an employee had fallen ill after December 1, 2009, they must notify their employer by April 23, 2026, to claim paid leave.

For employees who left the company before April 24, 2024, the standard three-year limitation period for salary claims applies. For example, a former employee wishing to claim paid leave benefits for sickness after December 1, 2009, must do so within three years of leaving the company. 

Note that the removal of the one-year limit for acquiring paid leave during work stoppages due to a professional accident or illness does not apply retroactively.

Takeaway: Employers should proactively adapt to the changes in the law, and update their policies right away. Employers must also communicate the updated policies with their employees to be compliant with the regulatory standards.